FAST FIVE: "The Markets Implications Are Enormous": Trade War With China Is Not About Trade But About Geopolitics

Published by on May 20, 2019

In any case, America's economic power is still unmatched.

The new angle here is that America's reliance on foreign energy has drastically reversed in the past ten years (Chart 6), opening the door to a renewed battery of sanctions and tariffs against US foes.

Note that the US enjoys one of the lowest foreign trade dependencies as a share of GDP in the G20, only slightly above after Argentina and Brazil (Chart 15).

China has been so effective at squeezing out manufacturers that it has ended up in a position of weakness, with limited ability to retaliate against the United States in a trade conflict.

In contrast, the aging population problem in Developed Markets is mostly confined to Japan and Europe, while the US actually has still a growing population of working age (Chart 19).” Why is this important.

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